A lot of sellers would require proof of funds or proof of pre-approval before doing a deal anyway, so that might not be an issue for some sellers, but for those that went on good faith they would be bound to whether or not you had the mining ability to secure financing.

I would work with them as long as you don't loose any rental income.

Your vacancy, costs and turn times are out of bounds.$4k for flooring is way too expensive for C class.  

You can technically wait until the day before you're closing to form the LLC and assign the contract but you'll need property and liability insurance ready to be bound and a title commitment in the LLC name before you close, so realistically, you should do it at least a couple of days in advance.

As folks are used to listing with agents and selling.. especially MF ... the MF are usually owned by a little more sophisticated folks.. and are not going to be like the lambs that get suckered into tying up their homes with little to NO EM and with a buyer who actually can't close.The other thing is if your bound and determined to do this.. then set up transactional funding so you can close.. find a super short term lender and partner with them... bring the deals in Close them then resell.. there is a LOT of ways to make money WITH a real estate license.. the broker without a license is starting to get some pretty good scrutiny in many states.. and its really not a long term vocation for most and lastly  its very very hard.. and VERY few succeed at it.. all though many throw their limited capital at direct mail or what have you only to come up with no results..I saw one post were a guy on BP spend 75k on direct mail.. got his money back and only made like 40 or 50k for the year... you spend 75k marketing your self as an agent you will knock down 250 to 500k in your sleep.

If there is a lot of snow and the winter is long they tend to loose money with the all inclusive contracts.

Some folks also get into a similar feeling after job loss, divorce, etc. resulting in foreclosure.You're right, of course - you can't fix stupid any more than you can fix those bound and determined to trash their credit and their finances.

The reality is some of the people getting in on an appreciating market will get in too late, lose equity, maybe not have the means to withstand a down market or do not have the stomach to withstand loosing much of their equity, and sell during the down turn often at a loss. 

If the full gut job down the street got $35K, you may be  able to get out this without loosing anything.

Even if the landlord is/was not a licensed individual they are still bound to abide by the rules according to landlord-tenant law, including where the deposit is held and how it is documented.